Market Overview

Car Insurance 2020 New Guide: What Is GAP Insurance And Why Drivers Should Buy It

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Los Angeles, CA (PRWEB) January 26, 2020

Buying a brand new car is one of the best feelings a driver can experience. But for some unlucky drivers, that feeling of joy doesn't last that much. If a policyholder's vehicle gets totaled in an accident, or it gets stolen the insurance company will only pay the actual cash value of the car and not the price of a brand-new vehicle.

GAP, short for guaranteed asset protection, is an optional coverage, that will cover the cost difference between the retail price of a new car and the actual cash value offered by an insurer, if the policyholder's vehicle gets totaled in an accident, or it gets stolen. Depending on the insurance company, cars that are seven years old or less are eligible for this coverage.

GAP insurance should be bought in the following situations:

  •     When policyholders are financing a car that loses value quickly. Many cars lose value quickly, but some models depreciate very quickly. In some cases, certain models can lose as much 75% of their value, after their first three years on the road.
  •     On long term loans. On short term loans, the gap between what a policyholder owes on his car and the actual cash value will begin to narrow and disappear much faster than on long term loans.
  •     When the down-payment is lower than 20%. In this case, the policyholder owes to the lender more than the car is worth.
  •     Vehicle leasing. The lender will probably insist to purchase GAP insurance, alongside collision and comprehensive coverage.
  •     If the policyholder drives a lot. Cars with high mileage depreciate more quickly.

For additional info, money-saving tips and free car insurance quotes, is an online provider of life, home, health, and auto insurance quotes. This website is unique because it does not simply stick to one kind of insurance provider, but brings the clients the best deals from many different online insurance carriers. In this way, clients have access to offers from multiple carriers all in one place: this website. On this site, customers have access to quotes for insurance plans from various agencies, such as local or nationwide agencies, brand names insurance companies, etc.

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